Exhibit 10.7
OLIN CORPORATION
2003 LONG TERM INCENTIVE
PLAN
(Codified as of October 22,
2008)
The general
purposes of the Olin Corporation 2003 Long Term Incentive Plan (the
“Plan”) are to (i) attract and retain persons eligible
to participate in the Plan; (ii) motivate Participants, by means of
appropriate incentives, to achieve long-range goals; (iii) provide
incentive compensation opportunities that are competitive with
those of other similar companies; and (iv) further identify
Participants’ interests with those of other shareholders of
Olin Corporation (together with any successor, “Olin”)
through compensation that is based on Olin’s common stock;
and thereby promote the long-term financial interest of Olin and
its Affiliates, including growth in the value of Olin’s
equity and enhancement of long-term shareholder return.
As used in the
Plan:
(a)
“Affiliate” means any corporation, partnership, joint
venture or other entity during any period in which Olin owns,
directly or indirectly, at least 50% of the total voting or profits
interest.
(b)
“Award” means any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Share or
Dividend Equivalent granted under the Plan.
(c) “Award
Agreement” means any written agreement or other instrument or
document evidencing an Award granted under the Plan. The
terms of any plan or guideline adopted by the Board or the
Committee and applicable to an Award shall be deemed incorporated
in and a part of the related Award Agreement.
(d)
“Board” means the Board of Directors of
Olin.
(e) “Code”
means the Internal Revenue Code of 1986, as amended. A
reference to any provision of the Code shall include reference to
any successor provision of the Code.
(f)
“Committee” means a committee of the Board designated
by the Board to administer the Plan, each member of which is an
“outside director” for purposes of Section 162(m) of
the Code and a “non-employee director” for the purpose
of Rule 16b-3, and, to the extent the Committee delegates authority
to one or more individuals in accordance with the Plan, such
individual(s).
(g) “Dividend
Equivalent” means any right granted under Section 6(c)(ii) of
the Plan.
(h)
“Employee” means any employee of Olin or of an
Affiliate.
(i) “Exchange
Act” means the Securities Exchange Act of 1934.
(j) “Fair Market
Value” means, with respect to shares of Olin common stock,
the mean of the high and low per share sales prices of such common
stock as reported on the consolidated transaction reporting system
for New York Stock Exchange issues as of the relevant date, or the
last preceding trading date, if such Shares were not traded on such
date, and, with respect to any other property (including, without
limitation, securities other than Shares), the fair market value of
such property determined by such methods or procedures as shall be
established from time to time by the Committee.
(k) “Family
Member” means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law, including adoptive relationship,
or any person sharing the Participant’s household, other than
a tenant or employee.
(l) “Incentive
Stock Option” means an option to purchase Shares granted
under the Plan that is intended to meet the requirements of Section
422 of the Code.
(m) “Incumbent
Directors” means the individuals who, on the date this Plan
is approved by shareholders, constitute the Board.
(n)
“Non-Qualified Stock Option” means an option to
purchase Shares granted under the Plan that is not intended to be
an Incentive Stock Option.
(o) “Olin Voting
Securities” means Olin’s then outstanding securities
eligible to vote for the election of the Board.
(p)
“Option” means an Incentive Stock Option or a
Non-Qualified Stock Option.
(q)
“Participant” means an Employee granted an Award under
the Plan.
(r) “Performance
Share” means any grant of a right to receive Shares which is
contingent on the achievement of performance or other objectives
during a specified period.
(s)
“Person” has the meaning of such term in Section
3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act.
(t) “Released
Securities” means securities that were Restricted Securities
with respect to which all applicable restrictions imposed under the
terms of the relevant Award have expired, lapsed or been waived or
satisfied.
(u)
“Restricted Securities” means Awards of
Restricted Stock or other Awards under which outstanding Shares are
held subject to certain restrictions.
(v) “Restricted
Stock” means any grant of Shares, and “Restricted Stock
Unit” means the grant of a right to receive Shares in the
future, with such Shares or right to future delivery of Shares
subject to a risk of forfeiture or other restrictions that will
lapse upon the achievement of one or more goals relating to
completion of service by the Participant, or achievement of
performance or other objectives, as determined by the
Committee.
(w) “Rule
16b-3” means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended, or any successor rule.
(x)
“Shares” means the common stock of Olin and such other
securities or property as may become the subject of Awards pursuant
to an adjustment made under Section 4(b) of the Plan.
(y) “Stock
Appreciation Right” or “SAR” means any such right
granted under Section 6(b) of the Plan.
Section 3.
Administration .
(a) Powers of
Committee . The Plan shall be administered by the
Committee which shall have full power and authority to: (i)
designate Participants; (ii) determine the Awards to be granted to
Participants; (iii) determine the number of Shares (or securities
convertible into Shares) to be covered by Awards; (iv) determine
the terms and conditions of any Award; (v) determine whether, to
what extent, and under what circumstances Awards may be settled or
exercised in cash, Shares, other securities, other Awards, or other
property, or canceled, substituted, forfeited or suspended, and the
method or methods by which Awards may be settled, exercised,
canceled, substituted, forfeited or suspended, provided that no
such action will result in repricing of Options prohibited by
Section 3(e); (vi) determine whether, to what extent, and under
what circumstances cash, Shares, other securities, other Awards,
other property and other amounts payable with respect to an Award
under the Plan shall be deferred either automatically or at the
election of the Participant or of the Committee; (vii) interpret
and administer the Plan and any instrument or agreement relating
to, or Award made under, the Plan; (viii) establish, amend, suspend
or waive such rules and guidelines and appoint such agents as it
shall deem appropriate for the administration of the Plan; and (ix)
make any other determination and take any other action that it
deems necessary or desirable for such administration.
(b) Committee
Discretion . All designations, determinations,
interpretations and other decisions with respect to the Plan or any
Award shall be within the sole discretion of the Committee and
shall be final, conclusive and binding upon all Persons, including
Olin, any Affiliate, any Participants, any holder or beneficiary of
any Award, any shareholder and any employee of Olin or of any
Affiliate. The Committee’s powers include the
adoption of modifications, amendments, procedures, subplans and the
like as are necessary to comply with provisions of the laws of
other countries in which Olin or an Affiliate may operate in order
to assure the viability of Awards granted under the Plan and to
enable Participants employed in such other countries to receive
benefits under the Plan and such laws, provided that no such action
results in repricing of Options prohibited by Section
3(e).
(c) Board
Authority . If the Committee does not exist, or for
any other reason determined by the Board, the Board may take any
action under the Plan that would otherwise be the responsibility of
the Committee.
(d) Delegation
. Notwithstanding any provision of the Plan to the
contrary, except to the extent prohibited by applicable law or the
applicable rules of a stock exchange, the Committee may delegate to
one or more officers or managers of Olin or any Affiliate, or a
committee of such officers or managers, the authority, subject to
such terms and limitations as the Committee shall determine, to
grant Awards to, or to cancel, modify, waive rights or conditions
with respect to, alter, discontinue, suspend, or terminate Awards
held by, Employees who are not officers or directors of Olin for
purposes of Section 16 of the Securities Exchange Act of 1934, as
amended, provided that no such action shall result in repricing of
Options prohibited by Section 3(e).
(e) Prohibition on
Option Repricing . Notwithstanding any other
provision of the Plan, neither the Board nor the Committee may
reprice, replace or regrant any Option granted under the Plan or
any other plan of Olin, (i) through cancellation and replacement or
regrant with lower priced options or (ii) by lowering the option
exercise price of a previously granted award, without the prior
approval of Olin’s shareholders.
Section 4.
Shares Available for Awards .
(a) Shares
Available . Subject to adjustment as provided in
Section 4(b) of the Plan:
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The aggregate
number of Shares available for granting Awards under the Plan shall
be 1,700,000.
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For purposes of
this Section 4, other than Sections 4(c)(ii) and
4(c)(iii):
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If any Shares
covered by an Award are not delivered to a Participant or
beneficiary because the Award is forfeited or canceled, or if the
Shares are not delivered because the Award is settled in cash or
used to satisfy the applicable tax withholding obligation, such
Shares shall not be deemed to have been delivered for purposes of
determining the maximum number of Shares available for delivery
under the Plan; and
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If the exercise
price of any Option granted under the Plan is satisfied by
tendering Shares (by either actual delivery or by attestation),
only the number of Shares issued net of the Shares tendered shall
be deemed delivered for purposes of determining the maximum number
of Shares available for delivery under the Plan.
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(b) Adjustments
. In the event of any change in the Shares by reason of
stock dividends, stock splits, recapitalization, mergers,
consolidations, combinations or exchanges of shares, split-ups,
split-offs, spin-offs, liquidations or other similar changes in
capitalization, or any distributions to shareholders other than
cash dividends, (i) the numbers, class and prices of Shares covered
by outstanding Awards under the Plan (provided that no such
adjustment shall result in repricing of Options prohibited by
Section 3(e) of the Plan), (ii) the aggregate number and class of
Shares available under the Plan, and (iii) the numbers and class of
Shares that may be the subject of Awards pursuant to Section 4(c),
shall be adjusted by the Committee, whose determination shall be
conclusive.
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Without
limiting the foregoing, in the event of any split-up, split-off,
spin-off or other distribution to shareholders of shares
representing a part of Olin’s business, properties and
assets, the Committee may modify an outstanding Award so that such
Award shall thereafter relate to Shares of Olin and shares of
capital stock of the corporation owning the business, properties
and assets so split-up, split-off, spun-off or otherwise
distributed to shareholders of Olin in the same ratio in which
holders of the Shares became entitled to receive shares of capital
stock of the corporation owning the business, properties and assets
so split-up, split-off or spun-off or otherwise distributed,
provided that no such action results in repricing of Options
prohibited by Section 3(e).
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With respect to
Awards of Incentive Stock Options, no such adjustment shall be
authorized to the extent that such authority would cause the Plan
to violate Section 422 of the Code or any successor provision
thereto, unless the holder of such Award of Incentive Stock Options
agrees to convert such options to Non-qualified Stock
Options.
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Notwithstanding
the foregoing, a Participant to whom Dividend Equivalents or
dividend units have been awarded shall not be entitled to receive a
special or extraordinary dividend or distribution unless the
Committee shall have expressly authorized such receipt.
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(c) Additional
Restrictions . Subject to adjustment as provided in
Section 4(b), the following additional maximums are imposed under
the Plan:
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The maximum
number of Shares that may be issued for Options intended to be
Incentive Stock Options shall be 500,000 Shares.
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For any Award
intended to be “performance-based compensation” (as
that term is used for purposes of Code Section 162(m)), no more
than 300,000 Shares may be subject to Options and Stock
Appreciation Rights granted to any one individual during any
calendar-year period (regardless of when such Shares are
deliverable).
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For any Award
intended to be “performance-based compensation” (as
that term is used for purposes of Code Section 162(m)) other than
an Option or Stock Appreciation Right payable in Shares, no more
than 150,000 Shares plus no more than $1,000,000 may be subject to
such other Awards granted to any one individual during any
calendar-year period (regardless of when such Shares or cash are
deliverable).
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No more than
800,000 Shares may be issued pursuant to Restricted Stock Awards,
Restricted Stock Unit Awards and Performance Share Awards under
this Plan.
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Any Employee,
including any officer or employee-director, of Olin or an Affiliate
shall be eligible to be designated a Participant, subject to any
restrictions imposed by applicable law. An Award may be
granted to an Employee prior to the date the Employee first
performs services for the Company or the Affiliate, provided that
such Awards shall not become vested prior to the date the Employee
first performs such services.
(a) Options
. The Committee is authorized to grant Options to
Participants with the following terms and conditions and with such
additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall
determine:
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Exercise
Price . The
per Share exercise price shall be determined by the Committee,
provided that such exercise price shall not be less than the Fair
Market Value of a Share on the date of the Option grant.
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Option
Term . The
term of each Option shall be fixed by the Committee, provided that
in no event shall the term of an Option be more than a period of
ten years from the date of its grant.
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Exercise . The Committee shall determine the
time or times at which an Option may be exercised in whole or in
part, and the method or methods by which, and the form or forms in
which payment of the exercise price with respect thereto may be
made.
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Incentive
Stock Options . The terms of any Incentive Stock
Option granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code, or any successor provision
thereto, and any regulations promulgated
thereunder. Without limiting the preceding sentence, the
aggregate Fair Market Value (determined at the time an option is
granted) of Shares with respect to which Incentive Stock Options
are exercisable for the first time by a Participant during any
calendar year (under the Plan and any other plan of the
Participant’s employer corporation and its parent and
subsidiary corporations providing for Options) shall not exceed
such dollar limitation as shall be applicable to Incentive Stock
Options under Section 422 of the Code or a successor
provision.
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Termination
of Employment . In the event the employment of a
Participant to whom an Option has been granted under the Plan shall
be terminated (other than by reason of the Participant’s
death or disability), such Option may, subject to the provisions of
the next to last sentence of Section 6(a)(vi) be exercised (to the
extent of the number of shares that the Participant was entitled to
purchase under such Option at the termination of employment) at any
time within three months after such termination (which three-month
period may be extended by the Committee), but in no event shall
such three-month period or any such extension permit the exercise
of an Option after the expiration date of the
Option. Options granted under the Plan shall not be
affected by any change of duties or position so long as the
Participant continues to be an Employee.
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Agreement to
Service . Each
Participant receiving an Option shall, by accepting the Option,
agree that he or she will, during employment, devote his or her
entire time, energy and skill to the service of Olin and the
promotion of its interests, subject to vacations, sick leave and
other absences in accordance with the regular policies of, or other
reasons satisfactory to, Olin and its Affiliates. Such
employment shall (subject to the terms of any contract between Olin
or any such Affiliate and such Participant) be at the pleasure of
Olin or such Affiliate, and shall be at such compensation as Olin
or such Affiliate shall determine from time to
time. Upon termination of such Participant’s
employment either (a) for cause, or (b) voluntarily on the part of
the Participant and without the written consent of Olin, any Awards
held by him or her under the Plan, to the extent not theretofore
exercised or vested, shall forthwith
terminate. Retirement pursuant to any retirement plan of
Olin or of an Affiliate shall be deemed to be a termination of
employment with Olin’s consent.
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Death . If a Participant to whom an Option
has been granted shall die while an Employee, such Option may be
exercised by the Participant’s executors, administrators,
personal representatives or distributees or permitted transferees
at any time within a period of one year after the
Participant’s death (which period may be extended by the
Committee), regardless of whether or not such Option had vested at
the time of death. If a Participant to whom an Option
has been granted shall die after his or her employment has
terminated but while the Option remains exercisable, the Option may
be exercised by the persons described above at any time within the
longer of (a) the period that the Participant could have exercised
the Option had he or she not died, or (b) one year after the date
of death (which period may be extended by the Committee), but only
to the extent the Option was exercisable at the time of the
Participant’s death.
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Disability . If a Participant to whom an Option
has been granted shall become totally and permanently disabled, as
that term is defined in Section 22(e)(3) of the Code (or a
successor provision), and the Participant’s employment is
terminated as a result, such option may be exercised by the
Participant or permitted transferee within one year after the date
of termination of employment, to the extent that the Option was
exercisable at the time of termination of employment.
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(b) Stock
Appreciation Rights . The Committee is authorized to
grant Stock Appreciation Rights to Participants which may but need
not relate to a specific Option granted under the
Plan. Subject to the terms of the Plan and any
applicable Award Agreement, each Stock Appreciation Right granted
under the Plan shall confer on the holder thereof aright to
receive, upon exercise thereof, up to the excess of (i) the Fair
Market Value of one Share on the date of exercise over (ii) the
exercise price of the right as specified by the Committee, which
shall not be less than the Fair Market Value of one Share on the
date of grant of the Stock Appreciation Right. Subject
to the terms of the Plan and any applicable Award Agreement, the
exercise price, term, methods of exercise, methods of payment or
settlement, including whether such SAR shall be paid in cash or
Shares, and any other terms and conditions of any Stock
Appreciation Right shall be as determined by the Committee, but in
no event shall the term of a Stock Appreciation Right exceed a
period of ten years from the date of its grant.
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Issuance . The Committee is authorized to
grant Awards of Restricted Stock, Restricted Stock Units and
Performance Shares to Participants.
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Dividends
and Dividend Equivalents . An Award (including without
limitation an Option or Stock Appreciation Right) may provide the
Participant with the right to receive dividend payments or dividend
equivalent payments with respect to Shares subject to the Award
(both before and after the Shares subject to the Award are earned,
vested, or acquired), which payments may be either made currently
or credited to an account for the Participant, and may be settled
in cash or Shares as determined by the Committee; provided, however
that, no dividend payments or dividend equivalent payments shall be
provided, permitted or credited to the extent that such payments
would cause an Option or Stock Appreciation Right to be subject to
Code Section 409A. Any such settlements, and any such
crediting of dividends or dividend equivalents or reinvestment in
Shares, may be subject to such conditions, restrictions and
contingencies as the Committee shall establish, including the
reinvestment of such credited amounts in Share
equivalents.
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Restrictions . Any such Award shall be subject to
such conditions, restrictions and contingencies as the Committee
may impose (including, without limitation, any limitation on the
right to vote Restricted Stock or the right to receive any dividend
or other right or property), which may lapse separately or in
combination at such time or times, as the Committee may deem
appropriate, provided that in order for a Participant to vest in
Awards of Restricted Stock, the Participant must remain in the
employ of Olin or an Affiliate for a period of not less than one
(1) year after the grant of a Restricted Stock Award that includes
one or more performance criteria, and not less than three (3) years
after the grant of a Restricted Stock Award that does not include
one or more performance criteria, in each case subject to Section 9
hereof and subject to relief for specified reasons as may be
approved by the Committee. Notwithstanding the
foregoing, the Committee may grant Awards for Restricted Stock for
an aggregate number of Shares not to exceed 85,000 which vest in
less than one (1) year after the date of grant, including immediate
vesting, with or without any performance criteria.
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Forfeiture . Except as otherwise determined by
the Committee, upon termination of employment for any reason during
the applicable restriction period, all Shares of Restricted Stock
still subject to restriction shall be forfeited and reacquired by
Olin.
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Performance-Based Awards . The Committee may designate whether
any such Awards being granted to a Participant is intended to be
“performance-based compensation” as that term is used
in Section 162(m) of the Code. Any Award so designated
shall be conditioned on the achievement of one or more performance
measures. Performance measures that may be used by the
Committee for such purpose shall be based on one or more of the
following criteria, on an absolute or a relative basis:
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Economic Value
Added/EVA ® ,
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total
shareholder return.
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For Awards
intended to be “performance-based compensation,” the
grant of the Awards and the establishment of the performance
measures shall be made during the period required under Code
Section 162(m) and in accordance with Code Section 409A to the
extent applicable.
(d) Forms of
Payment Under Awards . Subject to the terms of the
Plan and of any applicable Award agreement, payments to be made by
Olin or an Affiliate upon the grant, exercise, or payment of an
Award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other
securities, other Awards, or other property or any combination
thereof, and may be made in a single payment or transfer, in
installments, or on a deferred basis, in each case in accordance
with rules and procedures established by the Committee and in
accordance with Code Section 409A to the extent
applicable. Notwithstanding the foregoing, the payment
of the exercise price of an Option shall be subject to the
following:
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Subject to the
following provisions of this subsection the full exercise price for
Shares purchased upon the exercise of any Option shall be paid at
the time of such exercise (except that, in the case of an exercise
arrangement approved by the Committee and described below, payment
may be made as soon as practicable after the exercise).
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The exercise
price shall be payable in cash or by tendering, by either actual
delivery of Shares or by attestation, Shares acceptable to the
Committee, which Shares were either acquired at least six months
before the exercise date or purchased on the open market, and
valued at Fair Market Valu
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